Semirara net income down 61% in H1

Danessa Rivera (The Philippine Star) - August 10, 2020 - 12:00am
https://www.philstar.com/business/2020/08/10/2034064/semirara-net-income-down-61-h1

MANILA, Philippines — Listed Semirara Mining and Power Corp. (SMPC) recorded a 61-percent drop in its first semester net earnings as the coronavirus pandemic dragged the prices and demand for coal and electricity.

In a statement, SMPC said it booked P1 billion in consolidated net income after tax in the second quarter, ending the first semester with a net income of P2.2 billion.

However, the first semester net income was a 61-percent drop from the P5.7 billion recorded in the same period last year.

The company said the pandemic-induced containment measures dragged down coal demand and average selling price, as well as electricity sales and average selling price from March to June.

“We saw historic dips in prices, particularly in April when global Newcastle coal prices reached $49.30 per metric ton, the sharpest drop in six years,” SMPC president and COO Cristina Gotianun said.

“The decrease in spot market prices in April was also staggering. From P6.71 per kilowatt-hour (kWh) last year, it plunged to P1.40 per kWh,” she said.

In particular, earnings contribution from the coal business fell by 59 percent to P1.8 billion due to weak coal sales and average selling price.

From January to June, coal sales contracted by 27 percent from 7.9 million metric tons (MT) to 5.7 million MT, while average selling price per MT fell 21 percent from P2,229 to P1,765.

Meanwhile, power subsidiaries Sem-Calaca Power Corp. (SCPC) and Southwest Luzon Power Generation Corp. (SLPGC) recorded mixed results in the first semester.

SCPC contributed P726 million to the parent company, a turnaround from P242 million in losses during the same period last year.

The company attributed the improvement mainly to higher energy sales, which grew by 22 percent from 899 gigawatt hours (GWh) to 1,095 GWh.

The company’s sales volume improved following the completion of its life extension program for units 1 and 2, which allowed the company to reduce its outages by 53 percent year-on-year from 5,879 hours to 2,750 hours.

SLPGC booked P236 million in first half losses compared to P1.6 billion in earnings last year due to the combined effect of a 43-percent drop in energy sales from 856 GWh to 489 GWh and a 38-percent cut in average selling price from P4.73 per kWh to P2.92 per kWh.

DOE OKs Meralco’s 1,800 MW CSP

(The Philippine Star) - August 10, 2020 - 12:00am
https://www.philstar.com/business/2020/08/10/2034057/doe-oks-meralcos-1800-mw-csp

MANILA, Philippines — Manila Electric Co. (Meralco) has received an approval to bid out 1,800 megawatts (MW) of greenfield baseload capacity for 2024-2025, but should conduct the competitive selection process (CSP) as soon as possible.

The Department of Energy (DOE) has approved the 1,800-MW CSP of Meralco, according to Energy assistant secretary Redentor Delola.

Meanwhile, a clarificatory letter to Meralco’s request is awaiting the signature of Energy Secretary Alfonso Cusi, according to Energy Undersecretary Emmanuel Juaneza.

Earlier, Meralco first vice president and regulatory management head Jose Ronald Valles said the company submitted a clarificatory letter to the DOE. “We’re asking if there’s a possibility to move the basis forecast from current 2020 to 2022. We assume prices have normalized, providing a level playing field for generators. We’re just waiting for DOE to come back to us for that clarificatory letter,” he said.

In the DOE’s reply, the agency urged Meralco to find other ways to conduct the CSP amid the lockdown imposed in the country due to the COVID-19 pandemic.

“They requested if they can postpone it to a later date because of the difficulty in doing the CSP process given the situation that we are facing now. What we are trying to tell them, there are mediums they can utilize to be able to proceed with the procurement,” Delola said.

The country’s power distributor was asking DOE’s approval to conduct the CSP sometime in October.

“What we don’t want to happen is that the deferment of the schedule may delay the delivery of the power supply contract,” Delola said. “So what we are trying to say is that they should explore additional medium or other medium to proceed, so we can still be able to hit the target of delivery of supply.”

Earlier, Meralco asked for the DOE’s clearance to defer its CSP for 1,200-MW greenfield capacity needed for 2024 due to volatile oil prices and COVID-19 pandemic.

The request was made after “taking into account actual demand for 2019 and acquisition of demand-side and supply-side resources to cost- effectively meet needs of customers.”

Meralco president and CEO Ray Espinosa earlier said the coronavirus pandemic has prevented the power distributor from proceeding with the bidding.

The pandemic has caused too much price volatility in the international oil market, with prices ending lower for eight straight weeks out of nine earlier this year due to plunging global demand for fuel.

Espinosa also said the lockdown prevented Meralco from holding face-to-face meetings with the bidders for conducting and receiving voluminous documents that will accompany each bid.

Instead, Meralco said it would invite bidders to participate in the bidding for greenfield baseload capacity of 1,800 MW (net), for commercial operations in 2024-2025.

The 1,800 MW capacity would be taken from the discontinued 1,200 MW greenfield capacity, plus a 600 MW portion from the 1,500 MW baseload supply supposedly scheduled for CSP this year.

Meralco first conducted the CSP for the 1,200-MW greenfield capacity in September last year, but was declared a failed bidding after only Atimonan One Energy Inc., a unit of Meralco Powergen Corp. (MGen), submitted an offer.

After the failed bidding, the DOE directed Meralco to open the second round of its CSP to all power plants—whether old or new—to truly allow competition and get the least cost of power for consumers.

First Gen needs to complete LNG project reports

Danessa Rivera (The Philippine Star) - August 10, 2020 - 12:00am
https://www.philstar.com/business/2020/08/10/2034060/first-gen-needs-complete-lng-project-reports

MANILA, Philippines — The Department of Energy (DOE) has directed First Gen Corp. to complete additional requirements for its amended liquefied natural gas (LNG) terminal project before proceeding to the construction phase.

Energy Secretary Alfonso Cusi said the Lopez-led firm has revised its LNG terminal project in Batangas from an onshore facility to a floating storage and regassification unit (FSRU).

“They changed the concept from on shore terminal, now they’re going to go for an FSRU. So they submitted their amendments and that’s being addressed by our OIMB (Oil Industry Management Bureau),” he said.

The change in the plans required additional permits that First Gen needs to complete before a construction permit is issued by the agency, according to DOE-OIMB director Rino Abad.

“The change from onshore to offshore resulted in additional requirements for permitting,” he said. “We’re speaking about six additional permits because of the change, permits coming from DENR (Department of Environment and Natural Resources), PPA (Philippine Ports Authority), PCG (Philippine Coast Guard),” Abad said.

Apart from the technical aspect, First Gen also changed the project’s timeline after the DOE urged to fast-track the project.

Originally, First Gen said the FSRU project would introduce LNG to the Philippines as early as the third quarter of 2022.

Abad said the agency has told the Lopez firm to improve the timeline it first submitted.

“First Gen had a review on its project timeline because of the discussion that we should maximize the construction period,” he said.

From the original target of August 2022, the DOE director said the completion of First Gen’s FSRU project would be advanced to April of the same year.

“In fact, completion is January. But there’s a commissioning testing period so the full commissioning of the FSRU is April 2022,” Abad said.

Once First Gen completes the additional requirements, the DOE-OIMB will endorse the project for approval of the DOE secretary.

“These are the reasons why we haven’t submitted their project for recommendation to the secretary for the approval of the permit to construct. They still have submissions that we need to include in our recommendation to the secretary,” Abad said.

Cusi, meanwhile, assured that the DOE is ready to address the application of First Gen.

First Gen’s LNG project, in partnership with Tokyo Gas, was originally an onshore facility targeted for completion in 2024. It was eyed to have a capacity to process five mpta of LNG, and require investment of around $1 billion.

However, it revised plans to add an FSRU to be able to bring in LNG earlier.

An FSRU is a LNG carrier that is capable of storing LNG and which has an onboard regasification plant capable of returning LNG into a gaseous state and then supplying it directly into the gas network.

Last March, First Gen’s subsidiary FGEN LNG Corp. submitted to the DOE an application for a permit to construct, expand, rehabilitate and modify (PCERM) for the project.

The Lopez firm has earmarked around $300 million for the FSRU project, of which $60 million was spent this year, $110 million was set for 2021 and the remainder to be disbursed over a two- to three-year period, which is contingent on receiving the permit to construct from the DOE, First Gen president and COO Giles Puno said earlier.

First Gen is the largest company in the country that provides only clean and renewable power. In 2016, it declared that it would not develop, finance, or operate any coal fired power plants.

It owns and operates 30 power plants across Luzon, Visayas, and Mindanao with 3,492 megawatts (MW) of installed capacity, powering 21.0 percent of the Philippines’ gross generation as of end-2019.

NGCP donates COVID-19 test kits to hospitals

Danessa Rivera (The Philippine Star) - August 9, 2020 - 12:00am
https://www.philstar.com/business/2020/08/09/2033844/ngcp-donates-covid-19-test-kits-hospitals

MANILA, Philippines — The National Grid Corp. of the Philippines (NGCP) has donated real time-polymerase chain reaction (RT-PCR) machines to government hospitals in the National Capital Region to help raise testing in the region.

The RT-PCR machines are part of NGCP’s P1-billion donation for the COVID-19 response and relief efforts as the country continues to grapple with increasing numbers of confirmed COVID-19 cases.

“NGCP recognizes that the availability of vital medical equipment plays a huge factor in the government’s COVID-19 response efforts particularly in large government hospitals,” the grid operator said.

The Research Institute for Tropical Medicine (RITM) and the Lung Center of the Philippines (LCP) received two sets each of RT-PCR machines from NGCP last July 1, while the V. Luna General Hospital (VLGH) and Philippine National Police (PNP) Crime Laboratory also received one set of PCR machines each on Aug. 5.

“We hope that our donation of six sets of RT-PCR machines to RITM, LCP, VLGH, and PNP Crime Lab will expedite the confirmatory process for COVID-19 testing. NGCP’s stakeholders and the public can be assured that the company will continue to fulfill its commitment of supporting the country’s efforts to combat this pandemic,” the grid operator said.

A set, costing round P2.4 million, is composed of an ABI 7500 FAST RT-PCR machine, a desktop computer, and UPS.

RT-PCR tests, which are described by the Department of Health (DOH) as the gold standard in testing for COVID-19, are confirmed through an RT-PCR machine by detecting the actual presence of the virus even when a person is asymptomatic or does not register any of the common COVID-19 symptoms.

NGCP’s P1-billion donation also includes grocery items to over 1,000 local government units (LGUs) and medical equipment such as mechanical ventilators, ultrasound machine, portable x-ray machine, and PPEs to more than 300 hospitals and city/municipal/rural health units across the country.

Nuclear power in energy mix by year-end — DOE

Danessa Rivera (The Philippine Star) - August 8, 2020 - 12:00am
https://www.philstar.com/business/2020/08/08/2033628/nuclear-power-energy-mix-year-end-doe

MANILA, Philippines — The Department of Energy hopes to finalize the roadmap for the inclusion of nuclear power in the country’s energy mix by year-end after President Duterte signed an executive order (EO) supporting the Philippine nuclear energy program.

In a virtual meeting late Thursday, Energy Secretary Alfonso Cusi said EO 116 is a big step forward in putting nuclear into the country’s energy mix.

“We’ve been working on what is the national policy, we’re about to have that. The timeline to finalize that is before the end of this year. (That’s a) firm decision so the President would be able to make that decision on the inclusion of nuclear energy,” he said.

EO 116 provides for the creation of the Nuclear Energy Program Inter-Agency Committee (NEP-IAC) to be chaired by the DOE, with the Department of Science and Technology as vice chair.

The inter-agency body is mandated to primarily conduct a study for the adoption of a national position on a Nuclear Energy Program (NEP).

EO 116 requires the NEP-IAC to submit an initial report to the Office of the President within six months or by January 2021.

“We’re going to organize the inter-agency that would firm up the inclusion of nuclear in our energy mix,” Cusi said.

Since 2017, the DOE has been pushing for the inclusion of nuclear in the country’s energy mix.

Since then, a regulatory framework and legislative framework are being worked on.

The bill on nuclear energy has been certified by the President as urgent, Cusi said.

Meanwhile, the country —through the Nuclear Energy Program Implementing Organization — has been working on completing the country’s nuclear assessment based on the 19 issues laid down by the International Atomic Energy Agency (IAEA).

“We make sure that we comply with international regulations and the 19 hurdles that we have to finish, that’s almost complete with the help of IAEA,” he said.

Cusi said the public is also included in the policy for nuclear energy.

“Another factor is engaging the public to keep them informed, to be transparent about the project,” Cusi said.

So far, several provinces have expressed interest in hosting nuclear power plants.

Cusi said he had a recent meeting with Palawan Gov. Jose Alvarez, who expressed his openness to put up a nuclear power facility in the island.

Cagayan Economic Zone Authority and the province of Sulu earlier said they were open to host a nuclear power plant.

As for the Bataan Nuclear Power Plant, Cusi said the inclusion of nuclear energy in the country’s energy mix is not dependent on plans of the mothballed power plant.

PXP Energy hikes stake in SC 72

Danessa Rivera (The Philippine Star) - August 7, 2020 - 12:00am
https://www.philstar.com/business/2020/08/07/2033388/pxp-energy-hikes-stake-sc-72

MANILA, Philippines — Listed upstream oil and gas firm PXP Energy Corp. has raised its economic interest in Service Contract (SC) 72 offshore west Palawan.

In a disclosure to the Philippine Stock Exchange yesterday, PXP Energy said it increased its direct shareholding in FEC Resources Inc. (FEC) from 54.99 percent to 78.39 percent.

PXP Energy bought 449.99 million shares of FEC for $0.00225 or a total of $1.01 million via a stock rights offering.

Incorporated under the laws of Alberta, Canada, FEC is an investment holding firm whose principal asset is a 6.8 percent stake in Forum Energy Ltd.

With the increase in direct shareholding in FEC, PXP Energy also increased its economic interest in Forum Energy from 76.07 percent to 77.66 percent.

Incorporated in the UK, Forum Energy’s principal asset is a 70 percent interest in SC 72, an 8,800-square kilometer offshore petroleum license situated west of Palawan Island in the West Philippine Sea which contains the Sampaguita gas discovery.

“FEC intends to use the proceeds from the rights offering for general working capital purposes primarily the payment of administrative expenses and to provide the company with funds for investment opportunities including participation, in any fund raising of Forum Energy Limited in order to maintain its percentage ownership interest in that company,” PXP Energy said.

During its virtual stockholders’ meeting last month, the company said it hopes to resume exploration activities in petroleum blocks located in the West Philippine Sea.

PXP Energy holds a 78.98-percent operating interest in SC 72 or the contract to explore Recto Bank in the West Philippine Sea through London-listed Forum Energy Plc.

SC 72 has been under force majeure since December 15, 2014 due to the West Philippine Sea maritime dispute.

Forum Energy plans to drill two wells over the Sampaguita Field once the force Mmajeure is lifted.

In 2019, the SC 72 consortium—composed of Forum Energy Ltd. and Monte Oro Resources and Energy Inc.— invested $490,000 or over P25 million to redo 3D seismic data for the Sampaguita gas discovery, which has the potential to contain approximately 2.5 trillion cubic feet (TCF) of recoverable gas and could be the country’s new source of gas as replacement for the Malampaya project.

The contract for the Malampaya gas field in northwest Palawan will expire in 2024 but this can be applied for extension with the Department of Energy (DOE).

Operating since 2001, the Malampaya gas project supplies fuel to around 40 percent of gas-fired plants in Luzon namely the Ilijan, Sta. Rita plant, San Lorenzo, San Gabriel and Avion plants—which supply over 3,000 megawatts (MW) to the Luzon grid.

Meralco powers LSI shelters

(Philstar.com) - August 3, 2020 - 4:10pm
https://www.philstar.com/business/2020/08/03/2032627/meralco-powers-lsi-shelters

MANILA, Philippines — A Meralco crew conducts energization work at the Cultural Center of the Philippines Complex in Pasay City.

The power firm continues to provide reliable electricity to container vans serving as temporary shelters for locally stranded individuals, or LSIs.

These operations include the installation of six concrete poles and 350 meters of bundled wires.

This LSI facility is one of the many vital establishments in the Meralco franchise area given high priority when it comes to providing safe, adequate and reliable supply of electricity, especially during this time of pandemic.

Meralco provides continuous power supply to COVID-19 treatment centers

(Philstar.com) - August 3, 2020 - 3:40pm
https://www.philstar.com/business/2020/08/03/2032625/meralco-provides-continuous-power-supply-covid-19-treatment-centers

MANILA, Philippines — Meralco crews conduct service upgrades at the Philippine Arena Complex, Ciudad de Victoria, Bocaue, Bulacan.

The mega tent quarantine facility dubbed as We Heal as One Center, is a 300-bed facility that serves as a temporary treatment facility for COVID-19 patients.

The service upgrade work include the installation of 11 concrete poles, 240-meters three-phase overhead lines, nine distribution transformers, and three metering facilities.

The center is one of the many vital hospitals and COVID-19 treatment and testing centers in the Meralco franchise area.

EDC keen on geothermal projects overseas

Danessa Rivera (The Philippine Star) - August 1, 2020 - 12:00am
https://www.philstar.com/business/2020/08/01/2032057/edc-keen-geothermal-projects-overseas

MANILA, Philippines — Energy Development Corp. (EDC) is keen on pursuing geothermal projects overseas with pre-development projects lined up in the next couple of years.

EDC president and chief operating officer Richard Tantoco said the company is looking at expanding in Taiwan, Indonesia, Peru and Chile to further grow its geothermal capacity.

“We are also continuing with our predevelopment works in Indonesia, Peru and Chile for potentially larger capacity additions,” Tantoco said.

In particular, EDC is still keen on the Graho Nyabu project in Indonesia. The company intends to start civil works and drilling in the Sumatra project in the next two to three years.

Last year, the company was in talks with local concession holders in Taiwan for possible partnership and to offer technical expertise in geothermal development.

“Generally, we see governments starting to see the value of true baseload renewable energy in the markets we are present in, and this is being reflected in better price signals to support geothermal development,” EDC said.

The company has a joint venture agreement with Canada-based Alterra Power Corp. for geothermal projects in Chile and Peru but these have been put on hold due to challenging economic conditions.

At home, Tantoco said binary geothermal projects could yield an additional 80 megawatts (MW) in capacity once completed in a couple of years.

“For the geothermal platform, EDC is looking at several binary geothermal projects to expand its existing capacity particularly in Bacman, in Leyte and Mt. Apo,” he said.

In Leyte, the company owns and operates the 112.5-megawatt Tongonan, 180-MW Mahanagdong, 125-MW Upper Mahiao and 232.5-MW Malitbog geothermal projects.

The Bacon-Manito Geothermal Production in Sorsogon is composed of the 120-MW Bacman I and 20-MW Bacman II.

It also has geothermal power plants in Mindanao which have capacities of 52 MW and 54 MW.

PSALM sees P900 million savings from RPT cut

Danessa Rivera (The Philippine Star) - August 1, 2020 - 12:00am
https://www.philstar.com/business/2020/08/01/2032056/psalm-sees-p900-million-savings-rpt-cut

MANILA, Philippines — State-run Power Sector Assets and Liabilities Management Corp. is using nearly P900 million in savings to pay off debts following the signing by President Duterte of an executive order (EO) covering real property tax (RPT) breaks.

PSALM said it welcomes the issuance of EO 117, which reduces the 2019 real property tax (RPT) due on property, machinery and equipment used for production of electricity by independent power producers (IPPs) covered by build-operate-transfer contracts (BOTs) with government-owned or controlled corporations (GOCCs).

Since the said RPT is contractually passed on to these GOCCs, EO 117 mandates the reduction of such RPT obligations.

PSALM said the EO would result in an 80 percent or P861.2 million decline in RPT obligations.

“With the issuance of EO 117, PSALM’s RPT obligations due for taxable year 2019 amounting to about P1.06 billion at 80 percent assessment rate would be reduced to about P198.805 million at 15 percent assessment rate,” PSALM president and chief executive officer Irene Besido Garcia said in a statement.

“This translates to an estimated savings of P861.49 million for PSALM, which amount can therefore be utilized by PSALM for the payment of other maturing obligations assumed from (the National Power Corp. (Napocor)),” she said.

PSALM, a counterparty to several BOTs with IPPs, is responsible for the payment of the RPT obligations on such property, machinery and equipment.

PSALM has five contracts with IPPs covered by EO 117, which include the Ilijan natural gas power plant, the Pagbilao coal-fired thermal power plant, the Sual coal-fired thermal power plant, the San Roque hydro-electric power plant and the Mindanao coal-fired thermal power plant.

The state-run firm became a counterparty when Republic Act 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA) transferred to PSALM these BOT contracts from Napocor, including the responsibility to pay the RPT obligations.

With the recently issued EO 117, the RPT to be paid by PSALM for 2019 is reduced to an amount equivalent to an assessment level of 15 percent of the fair market value of such property, machinery and equipment depreciated at a rate of two percent per year, less any amount already paid.

Furthermore, all interests and penalties on such deficiency RPT are condoned.

All RPT payments already made over and above the reduced RPT shall be applied to RPT for the succeeding years.

Last year, President Duterte signed EO 88 which also reduced RPT liabilities of those power generation facilities of IPPs under BOT arrangements.

PSALM was able to save P890.5 million because of the EO.

PSALM is the agency mandated by the Electric Power Industry Reform Act (EPIRA) of 2001 to handle the sale of the remaining state-power assets and the financial obligations of Napocor. It has seven years left in its corporate life ending in 2026.

It reduces debts through the privatization of government-owned assets, collection of the proceeds and its effective implementation of its liability management program.

ERC seeks LGUs’ help to allow entry of meter readers

Published August 7, 2020, 7:32 PM by Myrna M. Velasco
https://mb.com.ph/2020/08/07/erc-seeks-lgus-help-to-allow-entry-of-meter-readers/

To steer clear of obfuscated electric bills, the Energy Regulatory Commission (ERC) has pleaded to the local government units (LGUs) to allow entry of the meter readers in their areas even on the advent of the modified enhanced community quarantine (MECQ) declaration — primarily in the service areas of power utility giant Manila Electric Company.

The regulatory body said the leadership of cities, municipalities and even barangays must at least be “lenient with meter readers of the distribution utilities and allow them to conduct their meter reading activities.”

The curtailment on people’s movement, akin to what happened in April and May, had precipitated the enforcement of “estimated billings” during enhanced community quarantine (ECQ) and MECQ rescripts in the country – but that proved disastrous because the servicing DUs were eventually swamped with massive complaints on the billings issued to their customers.

Preventing the recurrence of such nightmarish experience is clearly the ERC’s goal, because even its people and resources had been overburdened with complaints in the past months.

“We urge the LGUs under the MECQ to allow the distribution utilities’ meter readers, with properly issued IATF (Inter-Agency Task Force) pass and in complete personal protective equipment, to conduct actual meter reading to enable the DUs to reflect and bill the consumers’ actual electricity consumption in order to avoid possible bill shocks,” ERC Chairperson Agnes T. Devanadera asserted.

The Department of Energy (DOE) similarly indicated that it re-issued its order during the ECQ and MECQ periods on the provision of IATF IDs for essential workers in the energy sector, and that will include the meter readers.

The ERC also nudged the power utilities that aside from the requisite IDs and PPEs for their meter reader-personnel, they must also ensure ease of mobility for them by providing transportation while they perform their tasks.

The regulatory body indicated that until now, its Consumer Affairs Service (CAS) unit is still tackling torrent of grievances from consumers, hence, it cannot afford to be deluged with even more complaints.
Devanadera stressed “we are being proactive this time in order to prevent another episode of the surge of consumer complaints due to the failure of the DUs to conduct actual meter reading.”

The ERC chief thus reiterated “we are appealing to the LGUs to allow and extend any needed assistance to the meter readers to prevent a second wave of bill shock.”
And to continually address consumers’ grumblings over questionable billings, power interruptions and even technical glitch concerns, the ERC apprised Filipino consumers that it expanded its communication toolbox primarily to handle these concerns lodged before it for scrutiny and action.

EDC eyeing more projects in Latin America, Indonesia

Published August 7, 2020, 7:34 PM by Myrna M. Velasco

https://mb.com.ph/2020/08/07/edc-eyeing-more-projects-in-latin-america-indonesia/

 

Amid the gloom posed by the coronavirus pandemic, Lopez-led Energy Development Corporation (EDC) indicated that it will continue with its investment expansion plans in the Latin American countries of Peru and Chile and in Indonesia.

Indonesia and EDC President and Chief Operating Officer Richard B. Tantoco said “we are continuing with our pre-development works in Indonesia, Peru and Chile for potentially larger capacity additions.”

The company’s subsidiary in Indonesia – the PT EDC Indonesia, is targeting a geothermal exploration and development project with a prospective local partner, to be pursued via the Graho Nyabu geothermal block.

EDC previously indicated it has been permitted to drill one well within three years of signing of the geothermal concession with the Indonesia’s Ministry of Energy and Mineral Resources. The reckoning date was from last year.

For the capacity off-take eventually of the targeted geothermal power plant, the plan is to offer it to state-run Perusahaan Listrik Negara (PLN), the state-run power utility of Indonesia.

The company also has several concessions for geothermal exploration ventures in Peru and Chile – and while pre-development activities stalled for some time, EDC executives constantly sounded off these will carry on as targets on planned offshore investment expansions.

In the Philippines, the priority will be capacity expansion for hydro and geothermal portfolios – and these projects shall be underpinned by the P7.0 billion to P8.0 billion capital expenditures (capex) earmarked for the company this year.

Tantoco emphasized that for their planned 100-megawatt Aya Lake pumped storage hydropower project in Nueva Ecija, “the preliminary assessment and feasibility studies have just been completed.”

He further noted that local permits were already secured – and that access roads to the planned facility are now being built. The next focus of their pre-development works, according to Tantoco, will be on the required project permits with national government agencies.

On geothermal, the succeeding investment trajectory of the company is adding 80 megawatts on its capacity – to be accomplished by increasing the output of existing power plants.

“For geothermal platform, EDC is looking at several geothermal binary projects to expand existing capacity – particularly in Bacman (Bacon-Manito); in Leyte and Mount Apo plants,” Tantoco said.

Based on EDC’s application lodged with the Department of Energy, it is eyeing 29MW of capacity addition via its proposed Palayan binary geothermal facility; and another 20MW from the Tanawon geothermal development venture at its BacMan plant in Albay and Sorsogon provinces.

MVP-led firm hikes stake in unit for Recto Bank petroleum venture

Published August 6, 2020, 5:10 PM by Myrna M. Velasco

https://mb.com.ph/2020/08/06/mvp-led-firm-hikes-stake-in-unit-for-recto-bank-petroleum-venture/

 

Pangilinan-led PXP Energy Corporation has increased its stake in Forum Energy, the corporate vehicle that will lead targeted exploration and development at the Recto Bank oil and gas upstream venture in Northwest Palawan.

The company said it hiked direct shareholdings in FEC Resources Inc. (FEC) to 78.39-percent from 54.99-percent; and had similarly increased economic interest in Forum Energy Ltd. to 77.66-percent from 76.07-percent.

“The additional interest was acquired through a subscription to 449,999,986 new ordinary shares of FEC through a stock rights offering,” PXP Energy has stipulated in its disclosure to the Philippine Stock Exchange. Business magnate Manuel V. Pangilinan is the chairman of PXP Energy.

The company further indicated “the new shares were issued at approximately US$0.00225 per share for a total consideration of US$1,012,499.97.” FEC is a holding company incorporated in Alberta, Canada and holds interest of 6.8-percent in Forum Energy Ltd., an oil and gas company incorporated in the United Kingdom.

Forum Energy has investment focus in oil and gas exploration in the Philippines – and its principal asset is its 70-percent interest in Service Contract 72, or the license for the 8,800 square kilometers of offshore petroleum exploration in Palawan.

Proposed extended seismic survey and drilling at the Recto Bank had been suspended by the Philippine government until such time that the country can strike a “mutually acceptable framework” with the Chinese government on the exploration and development of resources in the disputed territories of the West Philippine Sea.

Given the slump in oil prices globally and its stalled exploration activities on key projects, PXP Energy reported that it logged a wider consolidated net loss of P56.3 million in the first half of this year versus P17.9 million in the same period in 2019.

The company’s consolidated petroleum revenues also plunged by 88-percent to P6.1 million from last year’s P51.4 million.

The deceleration in the firm’s financial performance, according to PXP Energy, had been attributed mainly to “66-percent lower output following normal decline rate in field production and one completed lifting.”

The company likewise noted the 62-percent slump in crude oil prices, primarily affecting yield from its Service Contract 14C-1 at the Galoc field in Palawan, and that had been linked to “substantially lower global demand amidst the ongoing Covid-19 pandemic.”

PXP Energy said it was able to manage its cost and expenses – at 46.7-percent lower to P39.5 million vis-à-vis P86.2 million last year.

It explained that such cost reduction was achieved due to “lower depletion cost in SC 14-C Galoc, following the decline in output;” plus the group’s general and administrative expenses had been slightly lower year-on-year.

More comprehensive technical study pushed for Malampaya’s life extension

Published August 5, 2020, 10:00 PM by Myrna M. Velasco

https://mb.com.ph/2020/08/05/more-comprehensive-technical-study-pushed-for-malampayas-life-extension/

 

The country’s lawmakers as well as state-run Philippine National Oil Company-Exploration Corporation (PNOC-EC) are pushing for a more comprehensive technical study to assess the scale of extractable gas resources that shall underpin life cycle extension for the Malampaya gas field.

Through House Resolution No. 1063 filed in the House of Representatives, several lawmakers are pushing for the country’s energy security agenda that shall be mainly anchored on the development of indigenous resources, including oil and gas as well as renewable energy (RE) installations.

For one, Representative Godofredo N. Guya noted in a virtual forum that the clock is now ticking for the remaining years of operations of the Malampaya field, hence, a decision from the government shall already be pressed to determine if that gas facility can still continually supply the energy needs of the Philippines.

Congressman Presley C. De Jesus of PHILRECA Party List, noted though that government to be led by the Department of Energy (DOE) must carry out a deep-dive technical study first on the extent of resources that can still be commercially developed before giving go-signal on fresh flow of investments in the gas project.

He further acknowledged the need for government to sort out challenges hamstringing investment flow – primarily in the exploration of oil and gas resources and in enticing capital for the energy sector in general.

De Jesus said such policy concerns will be tackled in the resolution that they have filed in Congress; and it is targeted that discussion and debates on the measure will kick off next week at the House Committee on National Defense and Security.

Retired General Rozzano D. Briguez, president and CEO of state-owned Philippine National Oil Company-Exploration Corporation (PNOC-EC), said the company will advance partnership with expert institutions, such as the University of the Philippines, on target to undertake further study of the country’s petroleum basins, including residual prospects for the Malampaya field. That initiative, he said, will be in coordination with the DOE.

Lack of dependable and viable seismic data, he emphasized, had partly contributed to the lag in the country’s petroleum exploration and development activities – that often in a year, it just entails one well drilling for the Philippines compared to 13.5 to 14 wells in neighboring countries such as Malaysia; and even more aggressive in the case of Indonesia.

Briguez said the company “intends to pursue collaboration with other institutions and companies to further study Philippine sedimentary basins to assess their petroleum potential given new information and advances in technology.”

He explained “the main objective is to open new areas of exploration by ensuring that the country’s geologic sedimentary basins are well-studied and properly marketed to possible investors.”

The PNOC-EC chief said their targeted study would eventually underpin plans to “pursue exploration and new service contracts,” primarily in prospect areas in Cotabato, Cagayan, East Palawan and West Philippine Sea basins.

Even the DOE previously admitted that “weak data” had been among the factors wobbling investors’ entry into the country’s upstream petroleum sector.

Beyond that, the country is also shackled by more complex issues, such as the territorial dispute in the West Philippine Sea and the seemingly low prospectivity of petroleum basins in the country.

There are also policies and rules still needing to be cleared up – such as the income tax treatment on the royalty sharing arrangement for the Malampaya project, which is still pending with the Supreme Court.
As the energy department has laid down, the tax case raised by the Commission on Audit (CoA) and the escalation of diplomatic tension at the West Philippine Sea fundamentally limped capital flow in the Philippine upstream oil and gas sector.

In terms of prospectivity of petroleum reserves, it has been emphasized that it could be very marginal in the Philippines – at just the rate of 10 to 20-percent; while other countries even in the ASEAN region have higher scale of prospectivity.

The upstream petroleum sector is one of the segments that the DOE would want to revive for investment flow when the coronavirus pandemic wanes, although it is cognizant of the fact that this could be a hard sell proposition given the decline of oil prices especially at the height of lockdown enforcements in many countries.
The energy department is lining up tender process for several petroleum blocks – including those in the West Philippine Sea, but it indicated that actual bidding will be scheduled when interested parties can already physically attend the process.

Power utilities warned on ‘new bill shock’ under MECQ

Published August 5, 2020, 3:16 PM by Myrna M. Velasco

https://mb.com.ph/2020/08/05/power-utilities-warned-on-new-bill-shock-under-mecq/

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The attention of the country’s power distribution utilities (DUs) had been called this early to make sure that no new round of ‘bill shocks’ will be suffered by the Filipino consumers during the newly-enforced modified enhanced community quarantine (MECQ) in Metro Manila and neighboring provinces.

In particular, Senate Committee on Energy Chairman Sherwin T. Gatchalian sounded off that with the MECQ declaration, “meter readings may not be possible due to the lockdown period,” and such raises probability that a number of affected consumers may appeal anew for deferred or extension payment in their monthly bills.

Given such circumstances, he noted that the DUs, including the Manila Electric Company (Meralco), has to see to it that a repeat of the “unexplained bill shocks” – that were reminiscent of the summer months — will not recur.

“The consumers cannot afford another round of bill shock in their electricity bills,” the lawmaker stressed; adding that heaps of customers are still seeking resolution of under-estimation or over-estimation on their electric bills in previous months.

Prompted by that contention, power utility giant Meralco said its meter reading activities will go on despite the re-declaration of MECQ in Metro Manila and other parts of Luzon covered by its franchise area, including those in Laguna, Cavite, Rizal and Bulacan.

The utility firm added that even its business centers will continually operate and attend to the needs of customers, including those on payments, concerns and inquiries as well as service applications.

Meralco said it is closely coordinating with the Energy Regulatory Commission (ERC) and the Department of Energy (DOE) in regard to its seamless business operations even in the re-implementation of stricter lockdown measures.

And on the deployment of personnel to assigned tasks, the power company guaranteed that it has been enforcing “strict implementation of protocols of the government’s Inter-Agency Task Force.”

On the sphere of meter reading, Meralco is appealing to the local government units and barangay officials “to recognize meter readers as among the essential workers granted permission to work amid MECQ, and allow them access to read meters of residences.”

The assurance given by the utility firm is for the process to be “unobtrusive” and that its deployed meter readers “will be in complete personal protective equipment,” as part of the comprehensive safety protocols instituted by the company.

It added that by ceaselessly carrying out meter reading activities, “this will ensure that actual consumption for the month will be billed accordingly.”  

Fuel prices rolled back

Published August 3, 2020, 5:03 PM by Myrna M. Velasco 

https://mb.com.ph/2020/08/03/fuel-prices-rolled-back/

 

Filipino consumers will experience slight relief on their fuel budgets this week as the price of diesel products will be on rollback by P0.30 per liter; while gasoline prices will be down by P0.25 per liter.

The price of kerosene, which is another important commodity for households and industries, will also be marginally reduced by P0.15 per liter.

As of this writing, the oil companies that already sent notices on rollbacks for prices at their pumps had been Pilipinas Shell Petroleum Corporation, Seaoil, Cleanfuel, PetroGazz, PTT Philippines and Total effective Tuesday (August 4); while industry competitors are anticipated to go along with their pricing leads.

But since Metro Manila and some provinces are back on the stricter modified enhanced community quarantine lockdown, it is seen that many motorists will not benefit fully from this round of price cuts.

The Department of Energy (DOE) similarly indicated that most oil companies will revert this week to prices without the cost-impact of the previously-imposed 10-percent import duty on crude and finished petroleum products.
The department explained that the oil firms already used up their inventories with the higher import duty, so they can now go back to their prices without the P1.50 to P1.70 per liter increase attributed to the fuel import levy; which in effect will be a cost reduction to consumers.

Energy chief says Palawan ‘open to hosting’ nuke plant

By: Ronnel W. Domingo - 04:30 AM August 08, 2020
https://business.inquirer.net/304874/energy-chief-says-palawan-open-to-hosting-nuke-plant

The Palawan local government has joined a short list of areas that are “open to hosting” a nuclear power plant, Energy Secretary Alfonso Cusi said, even as the Philippines is practically still approaching square one toward the use of the socially sensitive technology.

Cusi said in a briefing that Palawan Gov. Jose Alvarez expressed such interest, although this was “subject to public consultation.”

“Before this, we have received expressions of interest from [local authorities in] Sulu and [officials at the] Cagayan Economic Zone Authority,” the energy chief said.

Cusi provided this update as he lauded the recent signing of Executive Order No. 116, which directs the creation of an inter-agency committee to study the viability of nuclear energy and recommend the needed steps in the use of such technology “as well as existing facilities such as but not limited to” the Bataan Nuclear Power Plant.

He said the government was firm on including nuclear energy in the country’s energy mix— the portfolio of resources from which electricity is produced.

“The Philippines’ use of nuclear energy is not dependent on the possible use of the Bataan Nuclear Power Plant,” he said. “The three areas [Palawan, Sulu and Cagayan] are looking into small modular nuclear reactors.”

With the operation last December of the world’s first small modular nuclear reactor whose Russian developers said could be applied in countries like the Philippines, the International Energy Agency has started looking at hybrid nuclear-renewable energy systems to help rein in climate change.

The Austria-based United Nations agency said nuclear energy could back up renewable energy systems, “ensuring round-the-clock clean power even when there’s no sunshine or wind.”

Last January, the IAEA (International Atomic Energy Agency) said that if this new smaller technology proved to be successful, then nuclear power could be more affordable and even more flexible, to be integrated with renewables in so-called hybrid energy systems.

There are at least two dozen countries worldwide that are considering adding nuclear to their power generation mix, several of which—aside from Russia —are developing small reactors.

Over the past three years, the Philippine Department of Energy has been actively pursuing the nuclear option, having asked an IAEA-led mission to evaluate the country’s prospects.

The Philippines is merely “ready,” based on the IAEA assessment, “to make a knowledgeable commitment to a nuclear power program.”

The IAEA also said the Philippines has a lot more to achieve to move forward such as developing a legal and regulatory framework that ensures and demonstrates a commitment to safety, security and non-proliferation.

Further, The IAEA recommended for the Philippines to adapt existing national frameworks for emergency preparedness and response and for nuclear security. Between these milestones and the actual construction of a nuclear power plant is a long way to go.

Emperador in, Semirara out of PSEi

By: Doris Dumlao-Abadilla 01:33 PM August 07, 2020
https://business.inquirer.net/304720/emperador-in-semirara-out-of-psei

Tycoon Andrew Tan-led Emperador Inc. (EMP) will rejoin the Philippine Stock Exchange index (PSEi) effective Aug. 17, replacing Semirara Mining and Power Corp.

This was based on the result of the PSE index review from July 2019 to June 2020.

“The semi-annual review of indices ensures that the Exchange’s benchmarks reflect the performance of the best securities in the stock market in general and its sectors,” PSE president Ramon S. Monzon said on Friday.

Based on PSE’s policy on index management, a company may be considered for inclusion in the PSEi if it has a float level of at least 15 percent, ranks among the top 25 percent by median daily value per month in nine out of 12 months and ranks among the highest in market capitalization.

The PSE may also take into account relevant financial criteria to ensure that index constituents are closely representative of the market or a particular sector.

Group bucks nuclear energy plan

By: Ronnel W. Domingo - 04:42 AM August 01, 2020
https://business.inquirer.net/304136/group-bucks-nuclear-energy-plan

Electricity consumers and science advocates raised a howl over renewed government moves to make the Philippines a nuclear-power country, particularly as the recently signed Executive Order No. 116 revived the possibility of using the mothballed power plant in Bataan.

The Advocates of Science and Technology for the People (Agham) said using nuclear energy would only worsen the Philippines’ reliance on imported fuel.

Energy Secretary Alfonso G. Cusi has hailed EO 116, signed by President Duterte last July 24, as a “major step toward the realization of a Philippine nuclear energy program.”

EO 116 directs the creation of an inter-agency committee, which, among other tasks, will study the viability of nuclear energy and recommend the needed steps in the use of such technology, “as well as existing facilities such as but not limited to” the Bataan Nuclear Power Plant (BNPP).

“We vehemently oppose studies on the possible rehabilitation of the BNPP, an environmental and health hazard with obsolete technology perilously placed atop the active Lubao fault and on the slopes of Mt. Natib, a capable volcano,” Agham secretary general Feny Cosico said in a statement.

“This will not only put adjacent communities in danger but also violate current regulations of the International Atomic Energy Agency on sites where a nuclear plant can be built,” Cosico said.

Also, Agham noted that since the country did not have uranium resources to fuel nuclear power plants, it would be the same scenario as with fossil fuels for which the Philippines remained dependent on importation.

Aboitiz hydro firm settles property tax issue

August 4, 2020 | 12:08 am

https://www.bworldonline.com/aboitiz-hydro-firm-settles-property-tax-issue/

 

A COURT approved the deal signed between a hydropower unit of Aboitiz Power Corp. and an Ilocos Sur town seeking a compromise over a property tax issue.

The listed power company told the stock exchange, Monday, that Luzon Hydro Corp. (LHC) settled a tax dispute with the Municipality of Alilem after the Regional Trial Court (RTC) of Tagudin issued its judgment on July 27 validating all recommendations listed in their deal.

The two parties met on Feb. 14 to discuss the settlement of their tax row. They later came up with a compromise agreement on July 22 and filed the signed deal with the RTC for its judgment a day after.

To recall, the renewable energy firm received in December last year a notice of real property tax (RPT) delinquency from the Alilem town government, which seek to collect P82.25 million in unpaid tax and accrued penalties for seven of the company’s properties between 2004 and 2019. The local government also put up five of those assets in an auction.

In response, LHC on Dec. 13 requested a temporary restraining order and preliminary injunction in a petition for prohibition and mandamus against the municipality to prevent the sale.

It had sought the implementation of Executive Order No. 60, which cuts the RPT on assets by independent power producers under build-operate-transfer (BOT) contracts and disregarding tax-related interest and penalties.

Upon the receipt of the town’s order, the Aboitiz power unit made a standing offer to the Ilocos Sur provincial government to pay its property tax computed based on the President’s order. However, the tender of payment was rejected.

The state-led Power Sector Assets and Liabilities Management Corp. (PSALM) had also asked the municipality to reconsider the auction of the said assets to consider its ownership rights and interests over them.

LHC runs the 70-megawatt Bakun AC hydropower plan in Alilem. The plant was constructed under the government’s BOT scheme, which means that the electricity it is producing is taken up by the National Power Corp. under a power purchase deal for 25 years from February 2001. In 2026, the government will seize the ownership of the plant.

Its generated power is also required to be dispatched to the Luzon grid.